CHANGES TO DEDUCTIBILITY OF ATO GENERAL INTEREST CHARGE
Dear Valued Clients,
We would like to advise you of an important change that may affect your 2026 tax position.
As part of the government’s ongoing reform of tax law, the Australian Taxation Office (ATO) has announced that, effective as at 1 July 2025, the General Interest Charge (GIC) will no longer be deductible for individuals and businesses. This also applies to current payment arrangements with the ATO.
General Interest Charge (GIC) is the interest charged by the ATO on overdue tax liabilities or on the shortfall in tax payments. The GIC interest rate for the July – September quarter of 2025 will be 10.78%
If you have any outstanding debt with the ATO, we recommend you consider a conversation with your lender, review the interest rates available, with the options to refinance any remaining ATO debts.
By replacing the ATO debt with a commercial or private loan, you may be able to reduce the effective interest rate as well as the option to be able to claim the interest on the alternative loan as a tax-deductible expense, provided the original debt is related to assessable income.
If you require further clarification or assistance, please contact either Kylie or Kerryn to discuss further. We are unable to give you financial advice but can explain these changes and how they affect you.
Kind Regards
All Accounting Matters Pty Ltd
